You only need one accountant. There's no reason to have more
than one attorney. But if you have only one bank, it's time to
go shopping.

There are a number of reasons to use more than one bank,
beginning with borrowing ability. "Doing business with the
same bank for years usually makes it easier to get a loan when you
need it," says Linda Fayerweather of Fayerweather Consulting,
a Toledo, Ohio, business coaching firm. "But banks'
lending policies change from year to year, often quarter to
quarter. If you need a loan just when your bank has become more
rigid, where do you turn?"

Fayerweather, former director of the Delaware Small Business
Development Center, says many entrepreneurs believe it's better
to have all your accounts at one bank. "Not true," she
says. "Some of my clients have business accounts at one bank
and payroll at another--mainly so they won't be tempted to
touch the withholding funds--but the major benefit is having
another banking relationship, maybe getting free services, better
interest rates or strategic business services while establishing
credit with a new bank." That's especially important in
this era of bank mergers, when "you [may] suddenly find your
bank dramatically altered or even closed," she says.

Review all charges annually and compare your bank to the
competitors, suggests Fayerweather. "Don't change banks
yearly, but do shop for the best rates and services and the lowest
fees," she says. "You may need three banks." If you
prefer staying with one bank, ask it to waive or reduce your
service charges. "Banks are open to negotiating,"
Fayerweather notes. "They, too, want long-term
relationships."

Paul DeCeglie (MrWritePDC@aol.com) is a former
staff reporter for Journal of Commerce and American Banker.

That's Rich

If your goals include attaining a respectable income and
achieving financial security, just get a good education and work
hard. You'll get what you want, but nothing more, says Robert
T. Kiyosaki. If your goals are more along the lines of wealth and
entrepreneurial success, read Rich Dad, Poor Dad (TechPress,
$15.95, 800-308-3585), which Kiyosaki wrote with co-author Sharon
L. Lechter, CPA.

The book's basic contention: Most people struggle
financially because they spend years getting an education but end
up learning absolutely nothing about managing money. They work for
money but never learn how to make money work for them.

The fast-reading book, subtitled What the Rich Teach Their
Kids About Money--That the Poor and Middle Class Do Not, traces
Kiyosaki's childhood lessons, many orchestrated by his best
friend's father ("Rich Dad"). His only rule for
getting rich: "You must know the difference between an asset
and a liability, and buy assets." His definition of those
basic accounting terms: "An asset is something that puts money
in my pocket. A liability is something that takes money out of my
pocket."

Retired at 47, Kiyosaki speaks from experience. After
introducing nylon-and-Velcro surfer wallets in 1977, he went on to
launch and finance other businesses and now lectures, invests in
real estate and develops small-cap companies.

Kiyosaki's real father ("Poor Dad") was an
educator who stressed a formal education and stable career, while
his Rich Dad was an entrepreneurial mentor. Through anecdotes and
discourse, Kiyosaki champions the ownership of businesses and other
income-producing assets, makes a case for financial literacy and
shares his insights on achieving wealth.

What's The Plan?

Thinking about setting up a 401(k)? It's reportedly the most
popular employer-sponsored retirement plan among small businesses
for several reasons: It helps attract and retain employees, it
provides tax deductions to employers, and it helps employees fund
their retirement. But is it the wisest choice for you?

The 401(k), in which participation by employees is optional,
allows you and your employees to shelter income from taxes. If you
elect to contribute matching funds to your employees'
contributions, however, it will impact your bottom line, now and in
the future. Consider carefully whether you'll be able to meet
that ongoing financial obligation.

You'll also need to decide if employees should direct
investments of their accounts, be given limited investment
alternatives or have investment decisions handled by the plan
administrator. Employees might prefer a broad range of investment
options, but that increases the complexity (read: cost) of plan
administration.

Here's the fine print: Your plan must be in writing, be
explained to all employees and exist for the exclusive benefit of
beneficiaries; it may not favor highly compensated employees; it
must entitle employees to all their contributions and, once vested,
ensure employer-matching contributions; and it must make sure
employees are completely vested after five years of service.

Phillip Cook, a certified financial planner in Torrance,
California, says he wouldn't consider a 401(k) plan for a
company with fewer than 25 employees. "For one thing, it's
too expensive," Cook says. "It will cost a minimum of
$500 to $1,000 annually just to administer the plan. That's a
lot if you just have a handful of employees."

In addition, Cook warns, "Administration and filing of
reports [with the IRS, the Department of Labor, the Pension Benefit
Guaranty Corporation and all plan participants and beneficiaries]
is cumbersome and time consuming."

The certified financial planner says an entrepreneur "can
contribute the same amounts and get the same tax deductions with
plans that cost as little as $50 a year." He recommends a
SEP-IRA, a traditional profit-sharing plan, a money purchase
pension plan or a SIMPLE IRA, all of which are less expensive to
administer.

Setting up a retirement plan represents a commitment that will
affect your business for a long time. Before making decisions, get
assistance from financial and legal professionals. To find a
financial planner, contact the Institute of Certified Financial
Planners (800-282-PLAN, http://www.icfp.org); for a brochure on
IRA choices, call ReliaStar (888-757-5757).

Defining Moment

Debt Financing

A loan from a person or a financial institution that obligates
you to repay the money to the lender at a predetermined interest
rate.

Financial Fuel

Attracting investors

By George M. Dawson

Q. How do I attract investors to expand my classic car
restoration business?

A. First, rule out large professional venture capital
firms. Instead, look for "affinity" investors or
angels.

Affinity investors already have a personal interest in classic
cars. They understand and like your business. Affinity investors
come from three sources: your customers or others like them,
suppliers to your industry, or companies that sell noncompeting
products to classic car owners.

Investors are successful businesspeople. Gear up a highly
polished investment proposal. Get legal advice so you don't
crash into state securities regulations.

Offer the realistic expectation of a decent return to your
investors--somewhere between 20 and 30 percent annually, or its
equivalent. Create special financial or personal benefits for
investors. Your investors must believe they're part of a
privileged club. Offer special rallies, discounts,
services . . . you get the idea.

Pay 15 percent interest, and offer customer/investors a 10
percent discount on all parts and repairs. Offer to make a
supplier/investor your sole source or to pay a price premium on all
your purchases. You and a noncompeting restorer/investor can
exchange mailing lists, cross-market or cross-promote.

Which of your customers have money? Locate other owners of
classic cars through motor vehicle registrations and magazine
subscriber lists. Inspect the Thomas Register of American
Manufacturers (http://www.thomasregister.com)
for new supplier contacts. Who are the importers and distributors
in your industry? What other products do owners of classic cars
buy?

Never ask an investor for money on the front end. Ask for advice
instead. If the investor likes your plan, he or she will rally
behind you. Always leave a meeting with a new name to contact for
advice. Don't race to sign up just any investor. Make sure
their financial goals and personalities mesh with yours.